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TMI Blog2023 (3) TMI 203X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in confirming the assumption of jurisdiction u/s 147 of the Act and ought to have appreciated that the order under consideration was passed out of time, invalid, passed without jurisdiction and not sustainable both on facts and in law. 3. The NFAC failed to appreciate that the re-assessment completed without following the prescription of the law laid down by the Supreme Court in the case reported in 259 ITR 19 should be reckoned as nullity in law and further ought to have appreciated that having not shown any fresh/tangible material as well as having not alleged the failure on the part of the appellant in disclosing fully and truly all material facts at the original stage, the re-assessment consequently completed would defy the law consistently followed in terms of the proviso below section 147 of the Act." 4. Brief facts relating to above assessee are that the assessee is engaged in milk trading. She has also declared income i.e. business income from real estate business. The original assessment was completed by the Income Tax Officer, Ward-3(3), Trichy u/s.143(3) of the Act, vide order dated 28.03.2016. Subsequently, the Assessing Officer recorded reasons for reopening of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chased a vaccant site ad-measuring 17,859.60 sq.ft for a sum of Rs,27,00,000, In the P & L account as on 31.3.2013, the assessee had debited a sum of Rs.18,00,000 towards expenses of lease Rights Release on the above said property. 1.1 On perusal of the details filed by the assessee during the course of scrutiny assessment proceedings, it is seen that letter addressed by Smt. Uma Devi, M.Sathiskumar, M.Sakthivel, M.Lakshmi Priya (sellers) dated NIL that they had received a sum of Rs.27 lakhs as sale consideration from the assessee in respect of the above property and also filed runegistered sale receipt dated 14.3.2013 stating that assessee had paida sum of Rs.27 lakhs to the sellers and taken over possession as per POA registered with SRO, Thiruverumbur dated 14.03.2013. No complete sale document was registered. The assessee had converted the above property into plots and sold them as a P0A only. The assessee also filed a confirmation letter dt NIL from Sri E,Manickavel stating that he had received a sum of Rs.18,00000 from Srnt. SSeethaIakshmi (assessee) in order to release the lease-holdings on the above said property. Later on, the assessee filed a copy of unregistered Lease ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as addition had been made on the issue on which the assessment had been reopened. Hence, this ground is rejected." Aggrieved, now the assessee is in appeal before the Tribunal. 8. Before me, the learned counsel for the assessee first argued on the issue that there is no tangible material for reopening of assessment and according to him, fresh and intangible material is required for reopening of assessment because original assessment was completed u/s.143(3) of the Act. The learned counsel for the assessee drew our attention to the original assessment order passed u/s.143(3) dated 28.03.2016, wherein the Assessing Officer has considered the issue in great detail and relevant findings by the Assessing Officer on original assessment at para 6 reads as under:- "6. In the profit and loss account for the year ended 31/03/2013. the assessee has claimed deduction towards purchase of plots for Re. 27,10,000/- lease rights lease for Re. 18,00.000/-, filling of soil and sand JCB for Rs. 4,28,510/-, JCB charges for Rs.2,12,500/- commission paid for Rs.2,00000/-. The assessee was asked to produce the bills and vouchers, copy of sale deed in support of the expenses claimed by the assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs.25,20,000/- as current year's revenue expenditure. According to the Assessing Officer, this forms part of the indirect expenses of the project only and hence is not allowable. For this reason, the assessment was reopened by the Assessing Officer. We noted that the Hon'ble Madras High Court in the case of TANMAC India Vs. Deputy Commissioner of Income Tax, Circle - I, Pondicherry (supra) has considered an identical situation by following the decision of the Hon'ble Supreme Court in the case of Commissioner of Income Tax Vs. Kelvinator of India reported in [2010] 320 ITR 561 and held that "What is sought to be done by the re-assessment ought to have been achieved by scrutiny assessment proceedings. Having missed the bus earlier, the Department cannot be permitted to avail of the extended time limit in the absence of any new or tangible material. The Hon'ble Madras High Court has considered this issue in paragraph nos.10, 11 & 12, as under: "10. Let us now see the sequence of events that have transpired in this case. The Assessee filed a return of income pursuant to which, an intimation dated 01.12.1998 under section 143(1) (a) of the Act was issued. The provisions of Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he mind, the above fundamental requirement of Section 147, it would be apparent that the exercise undertaken by the Revenue in this case is not one of the re-assessment, but of review. The reasons make it abundantly clearly that the reassessment is sought to be initiated on the basis of the return of income and the enclosures which were available with the Assessing Officer since 02.11.2018 andf which ought to have prompted him to issue a notice under section 143(2) of the Act to conduct the proceedings under scrutiny. What is sought to be done by the re-assessment ought to have been achieved by scrutiny assessment proceedings. Having missed the bus earlier, the Department cannot be permitted to avail of the extended time limit in the absence of any new or tangible material, when the time for scrutiny assessment has elapsed on 31.03.2001, prior to issue of notice u/s.148. The notice under section 148 dated 09.12.2002 is thus an arbitrary exercise of power and a review of proceedings impermissible in law." 8. We find from the facts of the present case and the reasons recorded by the Assessing Officer that similar situation is before us, as was before the Hon'ble Madras High Court i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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